Statement of Administration Policy: S. 1318 - Amtrak and Local Rail Revitalization Act

(Senate)
(Pressler (R) South Dakota)

The Administration agrees with the thrust of S. 1318, to enable Amtrak to respond to consumer needs and market realities and to free itself from Federal subsidies. Although S. 1318 includes many provisions to that end, some of its provisions could impede achievement of these objectives or impose other unnecessary burdens.

The Administration is generally opposed to the imposition of arbitrary caps on punitive damage amounts, and would strongly oppose the inclusion of any provision in S. 1318 imposing such caps.

The Administration also strongly opposes the requirement that appropriated funds be provided to Amtrak on an accelerated basis. This requirement, which is not necessary to support Amtrak's operations, would shift $659 million of Federal outlays to FY 1996 that would occur, under current law, in FY 1997 and FY 1998. This would unnecessarily increase Federal borrowing costs.

In addition, the Administration strongly opposes Senate passage of S. 1318 unless it is amended to:

• Delete the provisions for a permanent authorization of appropriations for the Local Rail Freight Assistance Program (LRFAP), and modifications to the section 511 loan program. The President did not request, and Congress did not provide, any appropriations for LRFAP for the current fiscal year. The rail freight industry has clearly established its ability to operate without Federal subsidies or loans. Any future decisions to subsidize the rail freight industry should be made by local and State governments in the context of their overall transportation planning, not by the Federal Government.
  
  
• Delete the provisions which would subordinate the Federal interest as a creditor in the event of a default under the section 511 loan program. Such provisions increase the risk, and therefore the "subsidy rate," of loans guaranteed under this program, thereby reducing the number of loans which could be made with the resources available.
  
  
• Delete the proposed guarantee of new borrowing authority for Amtrak, as Amtrak already has sufficient authority to borrow. Amtrak would probably be required to rely on Federal subsidies to repay these loans. Consequently, any amounts appropriated for loan guarantees would leverage few, if any, additional dollars in loans.
  
  
• Delete the mandatory transfer of ownership of Washington's Union Station to Amtrak. Union Station has been successfully restored and redeveloped at Federal expense. This National Landmark should remain under Federal ownership.
  
  
• Provide an appropriate role for the Executive branch, including the Department of the Treasury, in reviewing recommendations to be made by the Amtrak Reform Council, which would be established by S. 1318.

Pay-As-You-Go Scoring

S.l 318 would increase direct spending. It is therefore subject to the pay-as-you-go requirements of the Omnibus Budget Reconciliation Act of 1990. OMB's preliminary scoring estimates for this bill are presented in the table below. Final scoring of this legislation may deviate from these estimates.

Pay-As-You-Go Estimates
($ millions)